Bridge Finance

It is the pre-public offering or pre-merger/acquisition finance to a company. It is the last round of financing before the planned exit. Venture capitalist help in building a stable and experienced management team that will help the company in its initial public offer. Most of the time bridge finance helps improves the valuation of the company. Bridge finance often has a realization period of 6 months to one year and hence the risk involved is low. The bridge finance is paid back from the proceeds of the public issue.

Not all business firms pass through each of these stages in a sequential manner. For instance seed capital is normally not required by service based ventures. It applies largely to manufacturing or research based activities. Similarly second round finance does not always follow early stage finance. If the business grows successfully it is likely to develop sufficient cash to fund its own growth, so does not require venture capital for growth.

VC investing is different from investing in liquid, publicly traded securities. However, many public companies once existed as VC investments, so knowing how this market works is a useful piece of knowledge about many companies.

Ex.1. Give a short summary of the text using the words and word combinations underlined in the text.

Ex. 2. Introduce a company in the market which once started its business by obtaining venture capital. Describe it using the plan of introducing the company. Plan:

- What the company deals with; - Who are they;

- How they plan to make money; - Demo;

- Secret source/technology; - Market analysis;

- Competitive assessment; - business model/financials/targeted milestones.

Writing

Analyze the table below and write an essay under the heading “Venture capital firms vs Business Angels. Pros and cons”. Follow the structure of a good essay: introduction, the main body (3-4 paragraphs) and the conclusion. Use the topic sentence to introduce the subject of each paragraph; write well-developed paragraphs, giving reasons/examples; use sequencing (e. g. Firstly, Secondly, etc) and linking words (e. g. however, although); make references to other sources and use quotations. Make use of the linking words that follow:

Дата добавления: 2015-10-31